We downgrade to Hold from Buy. While strategic progress and development appears broadly on track and in line with the medium term goal of building value in Health, the near term looks likely to be dominated by the VAT issue and to a lesser extent investment costs. The VAT issue is absorbing management time and we now assume there will be some drag from something we had expected to have been dealt with. Our TP moves to 90p (from 131p) and rating to Hold pending some positive news.
18 Sep 2015
Medium term picture good but near term drags
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Medium term picture good but near term drags
We downgrade to Hold from Buy. While strategic progress and development appears broadly on track and in line with the medium term goal of building value in Health, the near term looks likely to be dominated by the VAT issue and to a lesser extent investment costs. The VAT issue is absorbing management time and we now assume there will be some drag from something we had expected to have been dealt with. Our TP moves to 90p (from 131p) and rating to Hold pending some positive news.